When we purchased our home in 2007, there was an old 80 gallon hot water tank that came with the house. Originally, it wasn’t working, but Todd was able to fix it for $40 and it’s been running fine every since.
I have wanted to replace this hot water tank because we have no need for an 80 gallon tank and I believe that it is using a lot of electricity. It has been said that a previous owner of the home had a beauty salon on the one side of the house in which she needed such a large hot water tank. That’s fine and dandy, but we don’t need or even want it for our one bathroom home.
Todd and I have gone back and forth about buying a tankless vs. traditional water heater over the past two years. This weekend, we finally made our decision: We are purchasing a traditional hot water tank.
I would love to get our home to be as efficient as possible, and from what I had read, we thought the tankless would be the way to go. We were never able to find anything online showing exactly how much (or little) electricity a tankless water tank uses versus the traditional. We found out from Lowe’s this weekend that an electric tankless water heater has an EnergyStar rate of $485/year whereas a 40 gallon hot water tank has a rate of $508/year in electricity! There really isn’t much difference!
The cost for the tankless to be able to provide our home with enough hot water is $495 versus $203* for the traditional 40 gallon hot water tank. The difference in cost is $292 for the tank alone.
How many years would it take to break even? 12 ½ years!!!
I understand that a tankless only heats water as needed; however, at this point, we cannot justify the cost of putting in a tankless versus getting a smaller traditional water heater. When it is time to replace the new water heater, we will go through the process again to determine which is better for our home**.
If you have a tankless/point-of-use water heater, that is awesome! My hope is that one day we will be able to install a tankless water heater when the efficiency is more noticeable versus the traditional water heater.
If you have any additional information or comments that you feel we need to take into consideration before purchasing our traditional water heater, I’d love to hear them!
*The water tank we are looking at has a 6 year warranty. We could pay an additional $120 for one that has a 9 year warranty, but I have a handy hubby. He can fix just about anything.
**Please note: a natural gas tankless water heater uses less electricity; however, we do not have natural gas where we live. If you do, tankless may be the way to go!